Warner Music Group Free Streaming Advocates Lose Another $100m in 2014… Can’t Make This Up…

We can’t help but think these two things are related. Read the full stories at DMN… Here and Here…

So how’s that $3.00 per “user” annual ARPU working out from free streaming?

It’s amazing to us that the current conversation and controversy is still focused on the free tier. We’re not entirely certain that Spotify can even work at $10 a month / $120 per yer, per subscriber. The number of subscribers needed to replace the revenue from transactional sales exceeds those of any current mature subscription business.

It will take 60 Million PAID subscribers at $10 a month to generate about $7.2b in gross revenues annually. It takes another 30 Million (or 90 Million PAID Total) to come up with $7.5b payable to rights holders. Ninety Million. Paid…

Here’s some context for the chart above. Netflix only has 36m subscribers in the US, no free tier, and massive limitations on available titles of both catalog and new releases. Sirius XM, 26.3m in the US as a non-interactive curated service installed in homes, cars and accessible online. Premium Cable has 56m subscribers in the US paying much more than $10 a month and also with many limitations. Spotify… 3m paid subscribers in the US after four years. Tell us again about this strategy of “waiting for scale.” Three Million Paid… Three…